Dispute SettlementGeneral Aspects of WTO Dispute Settlement

Russian Federation, September 2012Susan Hainsworth, ITTC, WTO

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Part 1: The historic roots of the WTO Dispute Settlement System(GATT 1947)

Part 2: The basic characteristics of the WTO Dispute Settlement System

In this session you will learn about...

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Historic roots of the WTODispute settlement System

(DS under the GATT 1947, 1947-1994)

Part 1

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How were disputes settled under the GATT 1947?

Nearly 50 years of dispute settlement under the GATT 1947 ...

Positive consensus in the GATT Council to refer a dispute to a Panel, and to adopt a Panel report

Articles XXII and XXIII of the GATT 1994

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Challenges under the GATT 1947 dispute settlement system

• Rule of positive consensus

– Referring a dispute to a panel, adopting a panel report, authorizing countermeasures

– Risk of veto– Diplomatic character

• Yet, good results

– 101 adopted reports / 132 issued reports– Empirical research

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Basic characteristics ofthe WTO DisputeSettlement System (1995 – currently)

Part 2

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What is the Dispute Settlement Understanding (DSU)?

• 1986 – 1994 Uruguay Round– Punta del Este Ministerial Declaration

• 1995 Establishment of the WTO

Annex 2 to the WTO Agreement: Dispute Settlement Understanding

Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement)

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DSU builds on Articles XXII and XXIII of the GATT 1947

Members affirm their adherence...

To the principles for the management of disputes applied under Articles XXII and XXIII of GATT 1947...

And the rules and procedures as further elaborated and modified in the DSU

Article 3.1 of the DSU

Main actors in the WTO Dispute Settlement System

Art 2 DSU, The Dispute Settlement Body (DSB) Administers the WTO Dispute Settlement SystemEstablishes panelsAdopts panel and Appellate Body reportsMaintains surveillance of implementationNon-implementation? Authorizes retaliatory measures

The panel 3 – 5 panelists, ad hoc body

The Appellate Body Standing body of 7 members, 4-year term

WTO and AB Secretariat Assist panels and the AB

Main actors in the WTODispute Settlement System

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How the Dispute Settlement System works

Panel Report Appellate Body

Establishes No appeal? DSB adopts the report

DSB adopts the reports

The Dispute Settlement Body,

All Members

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developments in the DSU

• Standing Appellate Body

• DSB establishes panels and adopts panel reports by negative or reverse consensus

– Difference from dispute settlement under the GATT 1947?

– Under the GATT 1947: positive consensus

• Surveillance of implementation

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Only WTO Members (153 as of November 2009)

Recourse to WTO dispute settlement: Who?

NOT NGOs, individuals (although may lobby governments – indirect access)

Right to bring claims

Appellate Body:– No DSU provision requiring “legal interest”– Members have a broad discretion whether or not to bring a case

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Recourse to WTO dispute settlement: Regarding what?

Disputes under the following agreements (so-called covered agreements, “CA”), must be resolved pursuant to the DSU WTO Agreement Multilateral Trade Agreements (GATT 1994 + 12 other agreements on trade in goods) GATS TRIPS DSU (Plurilateral Trade Agreements – subject to decision)

Appendix 1 to the DSU

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Recourse to WTO dispute settlement: When?

DS provisions of the Covered Agreements When recourse to dispute settlement

For example: Article 17 of the Anti-Dumping Agreement... Article 11 of the SPS Agreement... Article 14 of the TBT Agreement ...

DSU Rules concerning dispute settlement

procedure

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Integrated system for Dispute Settlement

Article 23 of the DSU ... A single set of rules for all disputes

Article 1.2 of the DSU, Appendix 2 to the DSU … Only a few special or additional rules in the covered agreements which prevail over the DSU. For example:

Article 4.4 of the SCM Agreement ... Consultation period 30 days rather than the standard 60 days

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Nature

• Compulsory jurisdiction

– Members obliged to bring disputes under the Covered Agreements to WTO dispute settlement

– Accession: Consent to accept jurisdiction

• Exclusive jurisdiction

– No other fora– No unilateral action

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Objectives

Security and predictability in international trade

Preserving Members’ rights and obligations

Clarifying the existing provisions of the CA

Article 3.2 of the DSU

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Objectives

Positive solution to a dispute

Preferred outcome: Mutually acceptable solution

Withdrawal of measures inconsistent with the covered agreements

Article 3.7 of the DSU

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• Panel proceedings

• (Appellate Body review)

• Inconsistent measures...

– Withdrawal– Compensation / Suspension of concessions

...and if no mutually agreed solution reached

Measure

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Alternative ways to resolve a dispute

Informal means of assisting in reaching a mutually acceptable solution ...At any time after request for consultations, parties’ agreement ...

Parties’ agreement ... Notification to all Members ...

Good offices, conciliation, mediation Article 5 DSU

Arbitration Article 25 DSU

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special and differential treatment

Consultations: Members should give special attention to the particular problems and interests of developing countries... Article 4.10 of the DSUExtending consultation periods and according “sufficient time” to prepare argumentation... Article 12.10 of the DSUPanel composition: Panelist from developing country Member... Article 8.10 of the DSUAll stages: Members “shall give” particular consideration to the special situation of LDCs... Article 24 of the DSUAdditional legal advice from the Secretariat... Article 27 of the DSURight to invoke the provisions of the Decision of 5 April 1966 ... Article 3.12 of the DSU

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Main Stages

Good offices, conciliation and

mediation possible at any

moment

Consultations60 days

Panel review6 – 9 monthsAB review 60 – 90 days

Adoption of report by the DSB

Implementation

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Thank you!